Which Trigger Sends Oil Prices to the Moon?

You know how I’ve been telling you the war cycles I follow are converging in a way we haven’t seen in decades?

These most powerful forecasting tools are virtually screaming that all hell is about to break loose. Actually … it already has!

Chile has erupted into riots over a 4-cent hike in the Metro pass, for Pete’s sake.

Hong Kong is still seething with revolt against mainland China’s heavy hand.

Turks and Kurds are at each other’s throats in Syria.

And a proposed tax on the WhatsApp messenger service ignited protests in Lebanon, sending hundreds of thousands of people into the streets in the largest demonstrations in more than a decade.

Then last month, an Iranian oil tanker was hit by a missile in the Red Sea near Saudi Arabia. Just the latest in a series of attacks on ships carrying crude in the region.

Iran initially blamed the Saudis for the attack, which came just a couple weeks after a major attack on two Saudi oil fields the kingdom blamed on Tehran … and that caused a major spike in the price of oil.

Now there is a potentially horrific war looming between China and its neighbors. The main source of conflict? If you guessed oil and gas, give yourself a blue ribbon.

War could soon break out in two strategic areas:

The Senkaku Islands in the East China Sea are five uninhabited islets administered by Japan, with potentially enough offshore oil and gas to supply all of China’s energy needs for the next 45 years!

Some experts even compare the Senkaku fields to those of Saudi Arabia. Understandably, China is eying those fields greedily.

What’s scary is that the islands are included within the Treaty of Mutual Cooperation and Security between the U.S. and Japan, meaning that conflict over the islands would require the U.S. to come to Japan’s aid.

And military experts are terrified that even a minor, accidental military confrontation between China and Japan could quickly escalate into a world war …

“[D]on’t be too surprised if the U.S. and Japan go to war with China over the uninhabited rocks that Japan calls the Senkakus and China calls the Diaoyu islands,” wrote The Sydney Morning Herald. “And don’t assume the war would be contained and short.”

And this from a government-controlled Chinese newspaper:

These U.S. warships roaming around here in the East China Sea are slowly being considered by us Chinese as our moving targets right in front of our eyes.

The Spratly Islands in the South China Sea are another flash point.

It’s home to an undeveloped — but easily exploited — 100 billion barrels of oil and 882 billion cubic feet of natural gas.

The problem: The Spratly Islands have been caught in a decades-long dispute among six countries — the Philippines, Brunei, China, Malaysia, Vietnam and Taiwan. And like Japan, the U.S. is bound to come to the aid of its ally the Philippines in any conflict there.

China needs oil, and it will stop at almost nothing to secure it — even if it means a war in the South China Sea. Maybe that’s precisely why it’s rapidly ramping up its military presence there.

Would China really take the risk of starting a war? To get its hands on much-needed oil and natural gas … absolutely!

And any aggression in the South China Sea would disrupt the global supply of oil, sending prices to the moon.

You see, the South China Sea is also a major highway. The amount of oil shipped through the South China Sea in and around the Spratly Islands is three times greater than the amount of oil shipped through the Suez Canal and pipeline … and 15 times greater than the oil flowing through the Panama Canal.

So how can you profit the next time oil and gas prices ignite?

Most people can’t buy barrels of crude to store in their basements.

You CAN, however, invest in Exchange-Traded Funds that track oil and gas prices with the United States Oil Fund (USO) and the United States Natural Gas Fund (UNG).

But just as gold mining stocks outperform gold bullion, when the price of oil goes up, oil company stocks skyrocket.

So a better bet would be shares of the Energy Select Sector SPDR Fund (XLE).

Even better: Get the names of the two oil stocks my Wealth Megatrends subscribers are riding right now.

Leave a comment

One comment on “Which Trigger Sends Oil Prices to the Moon?”

Nancy Howitt November 8, 2019

Excellent organized help for any sized investor!
Much better than the hunt and peck method that has no rationale, no basis in assessed analysis…and systematic broadest to less braids spans of analyses factors make it easier for a non-financial trained but Liberal Arts ( history & sic. sci.) trained person to make sense of thins and the recognition of the inexorable reality of the K-wave nails what this reader has only anecdotally observed!
That theory should be a pre-requisite for college and advanced history teaching! That cyclical logic is the heart of his offering…by one who knows real learning when she sees it ! A historian and daughter of two historians! One a zPre-WWII Rhodes Scholar.

As one tho has learned an academic foreign language well as a teenager this must be the grammar phase/stage! Thank you! Nancy H-B